Climate Change Law
What is Climate Change Litigation?
Climate change litigation refers to the diverse array of legal cases in domestic and international Courts and Tribunals (including arbitral tribunals) that arise from:
- physical impacts of climate change on society and the natural environment; and
- obligations and responses of governments and companies to climate change and climate change policy (including the transition to net zero and the Paris Agreement).
These legal cases are sometimes categorised into 4 Waves, which are differentiated by industry, parties, case narrative, forum, legal bases, and remedies. The cases generally, and the differentiating criteria will continue to evolve.
First Wave cases are administrative law challenges to government decisions made under planning and/or environmental legislation approving specific projects and developments with a climate impact. Non-government organisations (“NGOs), public interest groups and aggrieved persons with standing prosecute these claims against municipal councils and governments. Declarations and injunctions, rather than damages is usually the relief sought.
Second Wave cases are negligence and nuisance claims against governments and companies seeking damages for the impact of climate change.
Third Wave cases consists of claims for breaches of directors’ duties and disclosure obligations under the Corporations Act 2001 (Cth), and consumer protection laws under the Australian Consumer Law. These claims are made against companies and/or directors for greenwashing and for failures to meet GHG emissions targets and ESG objectives.
Fourth Wave cases will arise as a result of parties suffering losses from the shift to a carbon neutral economy.
Examples of Climate Change Litigation
The examples set out below are indicative not exhaustive.
Not all of these examples sit neatly within the “Wave” categorisation.
This is a reflection of the evolving nature of climate change litigation.
Contract law/arbitration
Liabilities for and allocation of risk disputes arising under contracts for the implementation and/or funding of renewable energy projects aligned with the Paris Agreement or domestic emissions targets. Disputes on contractual performance of pre-Paris Agreement contracts impacted by the contracting of parties’ responses to climate change. Disputes under investment treaties arising out of a country’s response to climate change (e.g., the introduction of legislation to lower GHG emissions).
Corporations law
Court proceedings by shareholders against companies for failing to: (a) set adequate net-zero plans and targets; (b) adequately disclose exposure to climate risks; and (c) table climate change resolutions at annual general meetings. Derivative claims in Courts against company directors for breaches of duties for failing to properly plan for a transition to net zero.
Environmental and administrative law
Court proceedings: (a) by First Nations Peoples and NGOs against government and statutory bodies issuing licences permitting coal and gas projects, and renewable projects; and (b) by NGOs against the government and environment protection agencies for failing to adequately regulate the environmental impact of climate change litigation.
Human rights law
The human right to a clean and safe environment is not enshrined in Australian law. However, there are general statutory duties to the environment, and statutory recognition of the cultural rights in First Nations Peoples to conserve and protect the environment of their lands. Whether these general duties can be deployed in the same way as has occurred in overseas jurisdictions to pursue climate change strategies remains to be seen.
Insurance
Court proceedings on disputes in relation to coverage and exclusions for climate change risks under Directors & Officers, Errors and Omissions and Professional Indemnity insurance.
International law
Complaints filed with: (a) the National Contact Points against banks for the financing of fossil fuel projects that allegedly contributed to the climate crisis; (b) the United Nations Human Rights Committee against governments for breach of the rights of First Nations People under International Conventions enshrining a right to enjoy their culture; and (c) the International Court of Justice for an advisory opinion on obligations of countries under international law to ensure the protection of the climate system from anthropogenic emission of GHGs.
Misleading or deceptive conduct (“greenwashing”)
Complaints filed with: (a) the National Contact Points against banks for the financing of fossil fuel projects that allegedly contributed to the climate crisis; (b) the United Nations Human Rights Committee against governments for breach of the rights of First Nations People under International Conventions enshrining a right to enjoy their culture; and (c) the International Court of Justice for an advisory opinion on obligations of countries under international law to ensure the protection of the climate system from anthropogenic emission of GHGs.
Negligence
Class action claims against: (a) governments and statutory authorities for failing to adequately protect the class of citizens from the impact of climate change; and (b) companies for their activities contribution to climate change.